Banco Bilbao Viscaya Argentaria ((BBVA)) has held its Q1 earnings call. Read on for the main highlights of the call.
Banco Bilbao Viscaya Argentaria (BBVA) recently held its earnings call, revealing a strong financial performance marked by significant growth in profitability, customer acquisition, and loan expansion. Despite these positive outcomes, the bank faces challenges from new taxes in Spain and macroeconomic uncertainties in Turkey and Mexico, which could affect future performance.
Strong Tangible Value Growth
BBVA reported a notable increase in tangible value per share plus dividends, which rose by 14.1% year-over-year and 3.3% in the first quarter of 2025. This growth underscores the bank’s ability to enhance shareholder value consistently.
Outstanding Profitability
The bank achieved remarkable profitability, with a return on tangible equity reaching 20.2% and a return on equity at 19.3% for the first quarter of 2025. These figures highlight BBVA’s strong financial health and efficient capital utilization.
Record Net Attributable Profit
BBVA’s net attributable profit for the quarter reached EUR 2,698 million, marking a 23% increase year-over-year and a 10.9% rise from the previous quarter. This record profit reflects the bank’s successful strategies and robust operational performance.
Robust Loan Growth
The bank experienced significant loan growth, with Spain seeing a 6.6% increase year-over-year, while Mexico reported a substantial 17.2% growth. This expansion indicates BBVA’s strong market presence and ability to meet customer demand.
Increased Customer Base
BBVA acquired a record 2.9 million new customers in the first quarter of 2025, with 66% of these acquisitions occurring through digital channels. This growth demonstrates the bank’s effective digital strategy and appeal to a broader customer base.
Improved Efficiency Ratio
The efficiency ratio improved to 38.2%, a significant enhancement of 469 basis points compared to the previous year. This improvement reflects BBVA’s focus on cost management and operational efficiency.
Solid Asset Quality
BBVA maintained solid asset quality, with a Non-Performing Loan (NPL) ratio of 2.9% and a coverage ratio of 82%. The cost of risk stood at 130 basis points, indicating prudent risk management practices.
Banking Tax Impact in Spain
The introduction of a new banking tax in Spain resulted in a EUR 85 million charge booked under income tax for the quarterly accrual. This new tax presents a challenge to the bank’s financial performance in its home market.
Challenges in Turkey
BBVA faces challenges in Turkey due to higher than anticipated inflation and interest rates, which are expected to impact profitability. The bank anticipates net profit in Turkey to close somewhat below EUR 1 billion in 2025.
Potential Impact of Global Trade Uncertainty
Global trade uncertainties, particularly tariffs, pose potential risks to future loan growth and economic conditions in Mexico. These uncertainties could affect BBVA’s operations in the region.
Forward-Looking Guidance
BBVA’s forward-looking guidance emphasizes its strong performance and strategic focus. The bank highlighted its profitability, with a return on tangible equity of 20.2% and a return on equity of 19.3%, positioning it as potentially the most profitable European bank among the continent’s largest 15 banks. The CET1 fully loaded capital ratio improved to 13.09%, exceeding regulatory requirements. Additionally, BBVA reported an 8.5% growth in net interest income and a 19% increase in net fees and commissions, alongside a record acquisition of 2.9 million new customers and EUR 29 billion in sustainable business for the quarter.
In summary, BBVA’s earnings call reflected a strong financial performance with significant growth in profitability and customer acquisition. However, the bank must navigate challenges from new taxes in Spain and macroeconomic uncertainties in Turkey and Mexico. Despite these hurdles, BBVA’s strategic focus and robust metrics position it well for future growth.